Volume Strategy

The Sonar Volume Strategy allows users to buy and sell their crypto positions by matching incoming buy or sell transactions on the market chart. This strategy is ideal for large position holders who want to gradually enter or exit positions without causing significant price impact or disrupting market trends.

How It Works:

With the Volume Strategy, trades are executed based on incoming market activity. Users can choose to sell into incoming buy volume or buy into incoming sell volume. Additionally, users can set minimum and maximum market cap parameters to ensure that their trades are executed only when the token’s market cap is within their specified range. This provides extra control, ensuring that trades happen only under favourable market conditions.

• Selling: Users can set an aggressiveness level between 10% and 35% of the incoming buy volume. For example, if the incoming buy volume is $1,000 and the aggressiveness is set to 25%, the system will sell $250 into that transaction.

• Buying: Similarly, users can set an aggressiveness level between 10% and 200% of the incoming sell volume. For example, if the incoming sell volume is $1,000 and the aggressiveness is set to 150%, the system will buy $1,500 worth of the token.

If the incoming volume is too small to trigger a trade, Sonar will accumulate the volume until it meets the minimum threshold required for the strategy to execute. Additionally, MEV volume is excluded from the volume calculations to ensure that only legitimate market transactions trigger trades.

Example and Use Case:

Let’s say you have $100,000 worth of a token, and you want to gradually sell this position without negatively affecting the market price. You can set your Volume Strategy with an aggressiveness of 20%, meaning you will sell 20% of each incoming buy volume. If a $5,000 buy order appears on the chart, Sonar will sell $1,000 of your position into that buy. By using this strategy, you’re able to sell off your position incrementally, preserving the chart’s upward direction and avoiding a sharp price drop that could occur with a large, single sell order.

On the flip side, if you want to accumulate a position, you can set an aggressiveness level of 150% for buying. In this case, if there is an incoming sell order of $2,000, Sonar will automatically buy $3,000 worth of that token, allowing you to increase your holdings quickly while absorbing the selling pressure.

The Volume Strategy is particularly valuable for traders looking to protect their profits while maintaining market stability. By using this approach, traders can reduce the risk of price slippage, avoid damaging the token’s price action, and optimize their trades for both short-term and long-term gains.